Questions arise over New Hartford library's filing of taxes

Tuesday

Apr 8, 2014 at 7:00 AM

There are many questions and few answers regarding the New Hartford Public Library and the filing of taxes.

Ed Wiatr, library board trustee and finance committee member, raised concerns about whether the library has been filing tax documents for independent contractors, known as 1099 forms, as well as filing sales tax on items sold.

Wiatr claims the library hasn’t filed the 1099 forms since at least 2010. Not filing could open it up to liability and fines from the Internal Revenue Service.

“It’s gross incompetence on the part of the board,” he said.

Due to privacy and disclosure laws, the IRS could not release information on library filings.

Board President Jay Winn, who started the position in January, said he had no idea about previous years.

“As soon as we discovered anything like that we’d take steps to fix it,” he said.

Board Treasurer Heather Mowat said the library last year filed about $900 in sales tax to the state and $13,000 in 1099s. She didn’t know about prior years, however, since she took over her role in July.

“We’re going back and looking at the past couple of years to see if 1099s should be issued,” she said. If so, Mowat said, it would be remedied.

The 1099 forms are used to report miscellaneous income through payments made to an individual, partnership, estate or, in some cases, a corporation, who is not an employee, that add up to at least $600 during the year. The library files them for services such as legal advice, auditing or for raffle winners who won more than $600, Mowat said.

Wiatr said he knows of at least one such form — for a payment of more than $5,000 to law firm Bond, Schoeneck & King for legal services provided in 2012 — that never was filed.

Wiatr also claims that the library wasn’t charging sales tax on items sold, such as headphones, almonds and flash drives.

Mowat said sales tax is included in the price of each item sold. The goal of selling items such as memory sticks is to provide a service to visitors, not to make money, she said.

If the library hadn’t paid in past years, it could result in penalties, unless it can show that the failure was “due to reasonable cause and not willful neglect,” according to the IRS.

Follow @OD_Clukey on Twitter or call her at 792-4956.

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